Year in Review, Part 2

As I mentioned last Saturday, I’m going to spend the next couple of weeks highlighting some of our best advice from 2011 as a way to prepare for whatever the market hands us next. Today I’m going to focus on the second quarter, April through June, when the market reached its peak for the year and also started the decline that would continue long into the fall.

At the beginning of April, I wrote an issue focusing on investing wisdom from the greats. It contained several quotes from the world’s best investors that can inspire you and guide you on your investing journey. Read the issue here.

Later in the month, Cabot’s Publisher Tim Lutts discussed a long-term perspective on Apple (AAPL) after the Nasdaq 100 cut the stock’s weighting and raised the weightings of stocks like Microsoft (MSFT), Oracle (ORCL) and Intel (INTC). Read the issue here.

Dick Davis Digests Editor Chloe Lutts wrote about why more stocks are likely to pay dividends in the future and how you can benefit from owning such stocks. Read the issue here.

Cabot Benjamin Graham Value Letter Editor Roy Ward provided step-by-step instructions on how to get your portfolio ready for retirement. This is a must-read for investors at any phase of life. Read the issue here.

Cabot Market Letter Editor Mike Cintolo wrote a timeless piece detailing how to handle winning stocks. In the same issue, he discussed how to improve the three pillars of investing results. Read the issue here.

The most common question we receive at Cabot is “Which Cabot letter is right for me?” I produced a concise guide to answer that question at the end of April. Read the issue here.

I introduced you to the Contrary Opinion Buttons, which now appear here every week and which you can draw inspiration and wisdom from. Read the issue here.

Cabot China & Emerging Markets Report Editor Paul Goodwin wrote about discovering your investing personality, either conservative or aggressive, and how you should invest depending on the answer. Read the issue here.

Mike Cintolo wrote about the importance of doing almost nothing when the stock market turns against you. It’s difficult for many investors to just sit on their hands, but sometimes, less truly is more. Read the issue here.

Roy Ward wrote about the importance of having a game plan and how it’s led to his many investing successes. He follows the value investing system created by Benjamin Graham, which he explains in this issue. Read the issue here.

I related running to investing and discussed seven steps you need to take to become a successful investor. It’s a list that I refer to often and think you should too. Read the issue here.

Cabot Options Trader Rick Pendergraft wrote about suffering from analysis paralysis–when the sheer number of indicators you’re trying to follow completely overwhelms you–and how to avoid it. Read the issue here.
Chloe Lutts wrote about her tried-and-true approach of looking for coiled spring stocks, those with pent-up buying power that will be unleashed once the weight of the market is removed. Read the issue here.

Paul Goodwin wrote about the history of the solar industry and how it’s fared in the stock market. He reminded readers that no matter how good a story is, it’s important to remember that it’s still just a story. Read the issue here.

I wrote about the difference between those investors who believe it’s time, not timing and those investors who believe it’s timing, not time that leads to success in the stock market. Read the issue here.

Chloe Lutts finished the second quarter of 2011 by reminding us of the ever-important maxim: The stock market is not the economy. Learning this will save you a lot of heartache and allow you to make more successful investing decisions. Read the issue here.

That’s all for this week! Tune in next Saturday for more of the year in review.

Here’s this week’s Contrary Opinion Button. Remember, you can always view all of the buttons by clicking here.

Distrust Any Enterprise That Requires New Clothes

The actual quotation, from Henry David Thoreau, is “Beware of all enterprises that require new clothes, and not rather a new wearer of clothes.” Thoreau’s focus was on the person, not the clothes. For investors, the button is a reminder that we humans are fallible, and that success comes from improvement of ourselves, rather than the adoption of new investment vehicles and techniques.

—

In this week’s Stock Market Video Review, Cabot China & Emerging Markets Report Editor Paul Goodwin sees the market’s range of motion tightening up–with swings much narrower than they had been. This is a good sign, says Paul, as continuing tightening could lead to a new rally. But right now, there’s still lots of resistance, so Paul’s advice is to remain heavily in cash until the market direction becomes clearer. He names four stocks that he’s keeping a close eye on: Sohu.com (SOHU), Colfax Corp. (CFX), FMC Technologies and Fortinet (FTNT). Click here to watch the video!

In case you didn’t get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, there are links below to each issue.

On Monday, Cabot Publisher and Cabot Stock of the Month Editor Tim Lutts wrote about his experience filling out a K-9 form for his home insurance company. Tim pondered the ceding of more and more freedoms to insurance companies in the name of protection and welcomed your comments on the matter. Tim also recommended a stock that was recently featured in Cabot Top Ten Trader. Featured stock: Ulta Salon (ULTA).

On Tuesday, you heard from Paul Tracy, StreetAuthority co-founder and the chief investment strategist of StreetAuthority’s Top 10 Stocks. Paul discussed a stock that’s often reviled but has produced consistent gains in 2011. Featured stock: Phillip Morris International (PM).

On Thursday, Dick Davis Digests Editor Chloe Lutts reviewed the second half of 2011 through several of her Investment of the Week issues in honor of that newsletter’s one-year anniversary. She also recommended a stock that has been one of the market’s best performers in recent months. Featured stock: Dollar Tree (DLTR).

Until next time,

Elyse Andrews
Editor of Cabot Wealth Advisory

P.S. Don’t forget to reserve your copy of Cabot’s 10 Favorite Low-Priced Stocks for 2012 by Monday, December 12 to receive your 15% VIP discount for being a Cabot Wealth Advisory reader. Hurry, only two days left! Click here to order!

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Cabot Wealth Advisories

We designed Cabot Prime for dedicated investors like you—investors who want to own the best stocks, collect the biggest profits, and lock in a rising source of income for life. With Prime membership, you get full access to nine of our top advisories and many members-only benefits, including free admission to our annual Investors Summit.

Cabot Benjamin Graham Value Investor uses the methods developed by the father of value investing, Benjamin Graham, and popularized by Warren Buffet. A system that works well in all markets, it buys stocks when they're dirt cheap, and sells when they've reached full valuation, a process that takes two years for the average selection. What's important here is buying only when a stock's price is below its Maximum Buy Price, holding through thick and thin, regardless of the news or the action of the stock, and then selling when the stock reaches its Minimum Buy Price. These are great stocks to own if you're a conservative stock investor. Chief Analyst J. Royden Ward explains clearly how to build a portfolio of stocks that meet his strict requirements-plus every issue includes updated rankings on his "Top 275 Value Stocks," so you can check on other stocks you may own.

Cabot Dividend Investor focuses on preparing for retirement, recommending a solid range of income-generating stocks, preferred stocks, REITs, MLPs, closed end funds and utilities, with particular emphasis on risk, dividend safety and dividend growth. If you’re retired or thinking about retirement, this advisory is designed for you. Cabot Dividend Investor’s proprietary Individual Retirement Income System (IRIS) will help you allocate your assets for capital appreciation, current income, growth and future income investments according to your retirement goals.

Cabot Emerging Markets Investor focuses on the emerging markets economies, with special attention paid to the BRIC (Brazil, Russia, India and China) investment landscape. You'll discover the value of international diversification and the profit potential of investing in countries whose economies are growing far faster than that of the U.S. All these stocks are traded on U.S. exchanges, usually as American Depositary Receipts. Under the guidance of Chief Analyst Paul Goodwin, Cabot Emerging Markets Investor was recognized as the top investment newsletter in 2006 and 2007 by Hulbert Financial Digest, and was rated by Hulbert as one of the top investment newsletters in every five-year period 2004 to 2011.

This flagship investment advisory has been published since 1970 and it is recommended for all investors seeking to grow their wealth. You’ll receive invaluable investing lessons, so that you won’t just become a more successful investor—you’ll become a wiser investor!

Cabot Options Trader’s Chief Analyst and options expert Jacob Mintz uses calls, puts and covered calls to guide investors to quick profits while always controlling risk. Beginners and experts alike can benefit from following Jacob’s advice. Whenever Jacob determines the time is right, he sends specific option buy and sell alerts via email and text-message for immediate action. He also sends out a weekly update with his views on the options market, open option positions and his outlook for the coming week.

Cabot Options Trader Pro’s Chief Analyst and options expert Jacob Mintz uses the full spectrum of option strategies to recommend the option that best suits the trade opportunity—calls, puts, spreads, straddles, iron condors and more—while always controlling risk. Whenever Jacob determines the time is right, he sends specific option buy and sell alerts via email and text-message for immediate action. He also sends out a weekly update with his views on the options market, open option positions and his outlook for the coming week.

Cabot Small-Cap Confidential is a limited-circulation advisory for investors seeking profit opportunities in high-potential small company stocks. Each month, small-cap expert and Chief Analyst Tyler Laundon features in-depth research on one outstanding small-company stock that is a pioneer in its field and undiscovered by institutional analysts. Updates on all recommended stocks are sent weekly. The circulation of Cabot Small-Cap Confidential is strictly limited because the stocks recommended are often low-priced and thinly traded. In the publication’s first five years, spanning 2007-2012, the average stock recommendation gained 30.5%.

Cabot Stock of the Week offers the very best of all Cabot stocks across the investing spectrum. Each stock is personally selected by Cabot’s President and most Senior Analyst Timothy Lutts, and guided by the collective wisdom of all the Cabot expert analysts. As a subscriber of Cabot Stock of the Week, you’ll build your wealth and reduce your risk with the single best stock each week for current market conditions among growth, momentum, emerging markets, value, dividend and small-cap stocks.

Designed for experienced investors, Cabot Top Ten Trader is your ticket to fast profits in stocks that are under accumulation now. Every Monday you’ll receive a one-page profile of each recommended stock, including fundamental analysis, technical analysis and buy ranges. Plus... each Friday, Chief Analyst Michael Cintolo will give you an update titled "Movers & Shakers," so you’ll always know his latest thoughts on these fast-moving stocks. Cabot Top Ten Trader is your best source of advice on investing in the market’s hottest stocks.

Yes, you can have Growth AND Value! Combining both growth and value in her growth-at-a-reasonable price strategy, Chief Analyst Crista Huff uncovers stocks with strong growth catalysts that are selling at attractive valuations—the stocks that are temporarily overlooked by mainstream analysts and institutions. Crista applies her stringent screens to deliver the best stocks in three portfolios: Growth, Growth & Income, and Buy Low Opportunities. A subscription includes monthly issues with weekly updates, special bulletins with market and stock alerts and email access to Crista.

Wall Street’s Best Dividend Stocks presents the best income investments from the top Wall Street analysts, researchers and advisors. Editor Nancy Zambell scours more than 200 advisories and research reports to select the top recommendations. Dividend recommendations include high yield, growth and income, REITs, mutual funds, ETFs and more. One Spotlight Stock is featured each month, along with Nancy’s insight on the market and updates on past recommendations. One top recommendation arrives in your email box each morning, and then gets collected into an easy-to-read digest of 30 to 35 top recommendations each month.

Editor Nancy Zambell scours more than 200 advisories and research reports to select the top recommendations by the top analysts. Selections run the full range of opportunities: growth stocks, value stocks, technology, small-caps, biotech, pharmaceuticals, mutual funds, ETFs and more. One Spotlight Stock is featured each month, along with Nancy’s insight on the market and updates on past recommendations. Thirty-plus recommendations are delivered to you in Daily Alerts directly to your email box, and collected in an easy to read digest each month.

Reviews

“I want to extend particular thanks and appreciation this year. Beginning in February, I began following your timing and recommendations much more seriously…The six-figure portfolio I've been fooling with for only eleven months is up 125%, largely attributable to Cabot stocks and timing recommendations …I feel that 90% of this year's success is attributable to you and the Cabot letters."

-R. Hollander, Kansas City, Missouri

Market Update

From Cabot Top Ten Trader

The overall market is still in good shape, but growth stocks have been acting funky for a couple of weeks, and today the sellers were out in force, driving the Nasdaq and many leading stocks to big losses. We're not advising wholesale selling because many stocks look just fine, but you should honor your stops and make sure no losses get out of hand. We're moving our Market Monitor to a level 7 (out of 10) and will see how the market reacts from here.